UPDATE 1-Finnish PM downplays banking union forming this year

(Adds Liikanen comment, background)

HELSINKI, Sept 20 (Reuters) - Finnish Prime Minister Jyrki
Katainen has cast doubt on the creation of a European banking
union this year, insisting any such group needs a clean slate so
healthy banks do not suffer.

Finland has supported the idea of forming a united front
among euro zone nations to protect their lenders but the
proposal has divided opinion in the eurozone and worried
neighbouring states who fear their banks may be affected.

Germany is pushing for only a small number of
systemically-important banks to be subject to supervision by the
European Central Bank (ECB).

Helsinki has been wary of increasing the burden on its
relatively healthy financial institutions after its banks
experienced a financial crisis in the 1990s.

Finnish voters have been critical of European bailouts as an
easy way out for heavily indebted banks and governments.